Irish company audit, financial statements, accounting, consulting in the Ireland

In accordance with the requirements of section 282 of the Companies Act 2014, every company must properly keep accounting records sufficient to:

• show and explain the company’s transactions,
• disclose with reasonable accuracy the company’s current financial position at any time, and
• enable directors to prepare accounts in accordance with the requirements of the said Act and the requirements of Irish GAAP/ IAS.

Accounting data must contain in particular:

• daily records in respect of all amounts of money received in and paid from the company’s bank accounts and cash register, and transactions according to which such receipts and payments took place, and
• the company’s assets and liabilities data.

If there are commodity transactions in the company’s financial and business activity, its accounts must contain:

• statement of leftover stock in warehouses that the company has at the end of each financial year;
• all reports on changes in stock in warehouses based on which statements of leftover stock have been or will be made;
• accounting records regarding all purchased and sold goods, detailed enough to identify goods and what purchasers and sellers they belong to, except for cases when goods were sold by usual retail trade.

In accordance with the requirements of the tax legislation, a company must keep source documents during 6 years after the end of the reporting period.

In accordance with the Companies Act 2014, companies’ directors must provide shareholders with the following information at an annual general meeting:

• Profit and loss statement and statement of other comprehensive income for the period;
• Statement of financial position on the date of the end of the reporting period;
• Directors’ report;
• Auditor’s report.

Annual financial statements and a directors’ report must be signed on behalf of the company by two directors. If the company is a limited liability company or private limited company incorporated in accordance with the Companies Act 2014 and it has only one director, the documents shall be signed by the sole director.

All the above statements and reports must be enclosed with the annual return and provided to the Companies Registration Office. In addition, a certificate signed by director and secretary must be provided confirming that the presented financial statements are a real copy of the statements approved by the general meeting of shareholders. Micro and small companies can be exempted from the submission of the full financial statements according to section 352 of the Companies Act 2014 and exempted from audit according to section 350 of the Companies Act 2014.

Financial statements are not required to be enclosed with the first annual return presented within 6 months after incorporation of the company. Financial statements must be enclosed with all subsequent annual returns.

Since the Russian law does not have an analog to annual return, we consider it necessary to clarify this term. Annual return is a short report on the current structure of the company that is prepared by the company’s secretary annually. Normally, it includes:

• identification data (date of incorporation, registered address);
• information on directors and their resignations;
• information on secretaries and their resignations;
• information on the authorized capital, par value of shares, number of issued shares;
• information on shareholders and transfer of shares.

Each Irish company must file an annual return with the Companies Registration Office: annual return and financial statements.

The tax period coincides with the company’s financial year, but must not exceed 12 months.

A corporation profit tax return shall be filed within 9 months after the end of the tax period.

In many EU countries, including Ireland, VAT registration is done separately from a company’s general tax registration and only when such registration is necessary based on the company’s real activity.

Normally, a VAT return is filed and the tax is paid 6 times a year (every 2 months). Hence, the VAT periods are as follows: January-February, March-April, May-June, July-August, September-October, November-December.

If the VAT payable for the last year was less than 3 000 EUR, the VAT period is extended to 6 months: January-June, July-December.

If the VAT payable for the last year was between 3 000 and 14 400 EUR, the VAT period will be 4 months: January-April, May-August, September-December.

In addition, if a company makes transactions of purchase and sale of goods and services with companies incorporated in other EU countries, it must register in the INTRASTAT and VIES systems and file information with the tax authority in the prescribed form.

Large companies make two advance payments and a final payment, small companies (whose profit tax in the preceding period is less than 200 000 EUR) make one advance payment and a final payment. A company must make this payment not later than on the 23rd day of the ninth month if the company files documents in an electronic form, and not later than on the 21st day of the ninth month if the company files documents on paper.

A company must:

• calculate and pay a provisional tax within the prescribed period;
• fill out and submit a special form by the date of filing the return;
• pay the rest of the tax by the date of filing the return.

The late payment interest rate is 0,0219% per day for late payments or payments that have not been made in full. The interest is calculated by the multiplication of:

• the tax amount unpaid by the company;
• number of days of the delay;
• interest rate.

If tax accounts are not filed and the tax is not paid within the prescribed period, the company will also have to pay an additional fee of:

• 5% of the tax amounting to up to 12 695 EUR in the case of filing within two months after the due date or
• 10% of the payable tax but not more than 63 485 EUR if the application is submitted more than two months after the due date.

The value-added tax must be paid by the 19th day of the month following the end of each reporting period.

If the VAT is not paid on time, interest will accrue daily from the due date of the payment to the date of payment of the remaining amount. The interest rate is 0,0274% per day or part of day.

Besides preparation of their own financial statements, holding companies must prepare consolidated financial statements of the group and present them at a general meeting of shareholders at the same time with their own annual financial statements. The requirement to prepare financial statements of the group is contained in section 293 of the Companies Act 2014: “Where at the end of its financial year a company is a holding company, the directors of the company, as well as preparing entity financial statements for the financial year, shall prepare group financial statements for the holding company and all its subsidiary undertakings for that financial year.”

Exemption from consolidation in accordance with section 293 of the Companies Act 2014 as amended by section 19 of the Companies Act 2017, for financial years starting on 1 January 2017 or after that date, applies to holding companies that meet the requirements for small companies in accordance with section 280B or for micro companies in accordance with section 280E.

Rules for classifying a group of companies as small are similar to the rules for separate companies; the following qualifying conditions must be met (2 or more simultaneously):

1. the group’s turnover is not more than 12 000 000 EUR (or 14 400 000 EUR including intragroup transactions);
2. consolidated balance sheet total is not more than 6 000 000 EUR (or 7 200 000 EUR including intragroup transactions);
3. total number of employees is not more than 50.